nep-age New Economics Papers
on Economics of Ageing
Issue of 2013‒11‒16
eleven papers chosen by
Claudia Villosio
LABORatorio R. Revelli

  1. Is caring for elderly parents detrimental for women’s mental health? The influence of the European North-South gradient By Cinzia Di Novi; Elenka Brenna
  2. Gaining weight through retirement ? Results from the SHARE survey By Godard, Mathilde
  3. Retirement patterns of couples in Europe By Laura Hospido; Gema Zamarro
  4. Demographic Change in the Netherlands: Strategies for Resilient Labour Markets By Cristina Martinez-Fernandez; Femke Verwest; Leo van Wissen; Tamara Weyman; Frank Cörvers; Jouke van Dijk; Arjen Edzes; Andries de Grip; Marije Hamersma; Philip Taylor; Jesper van Thor
  5. Household Consumption at Retirement: A Regression Discontinuity Study on French. By Nicolas Moreau; Elena Stancanelli
  6. Envelhecimento Populacional, Perda da Capacidade Laborativa e Políticas Públicas Brasileiras Entre 1992 e 2011 By Ana Amélia Camarano; Solange Kanso; Daniele Fernandes
  7. Age Biased Technical and Organisational Change, Training and Employment Prospects of Older Workers By Roger, Muriel; Caroli, Eve; Behaghel, Luc
  8. Gauging the Burden of Public Pensions on Cities By Alicia H. Munnell; Jean-Pierre Aubry; Josh Hurwitz; Mark Cafarelli
  9. How would informal caregivers react to an increase in formal home-care use by their elderly dependent relatives in France? By Goltz, Andreas; Arnault, Louis
  10. In search of inclusion: informal sector participation in a voluntary, defined contribution pension system By Renuka Sane; Susan Thomas
  11. Positive and Negative Population Growth and Long-Run Trade Patterns: A Non-Scale Growth Model By Hiroaki Sasaki

  1. By: Cinzia Di Novi (Department of Economics, University Of Venice Cà Foscari); Elenka Brenna (Cattolica del Sacro Cuore, Dipartimento di Economia e Finanza)
    Abstract: In the last decades, both the lengthening of life expectancy and an accentuated decline in birth rates have reduced the consistency of the younger generational cohorts. Due to ageing population, the burdens of caregiving are projected to intensify in the next quarter of the century in Europe, especially for mature women. This paper investigates the impact of the provision of constant care for elderly parents on the mental health of adult daughters, between the ages of 50 and 65, living in different European countries. Data is collected from the Survey of Health, Ageing and Retirement in Europe (SHARE). Information on mental health status is provided by Euro-D depression scale, a standardized measure of depression employed across European countries. We focus on differences in the effects according to a North–South gradient: we test whether the relationship between informal caregiving and mental health differs across European macro- regions. Our results reveal the presence of a North-South gradient in the effect of caring on women’s mental health.
    Keywords: caregiver burden, depression, parent care, LTC systems, mature women.
    JEL: I10 I12 D10
    Date: 2013
  2. By: Godard, Mathilde
    Abstract: In this paper, we use IV-techniques to identify the causal e ect of retirement among the 50-69 year-old on Body Mass Index (BMI) and related weight measures. Based on the 2004 and 2006 waves of the Survey of Health, Ageing and Retirement in Europe (SHARE), the identi cation strategy exploits the European variation in retirement schemes to produce an exogeneous shock in retirement behaviour. Our results show that retirement induced by discontinuous incentives in social security systems causes a 0.20 point increase in the probability of being overweight or obese.
    Keywords: Body Mass Index; Obesity; Retirement; Instrumental Variables;
    JEL: I10 J26 C23
    Date: 2013–01
  3. By: Laura Hospido (Banco de España and IZA); Gema Zamarro (Dornsife Center for Economic and Social Research. University of Southern California)
    Abstract: In this paper we study the retirement patterns of couples in a multi-country setting using data from the Survey of Health, Aging and Retirement in Europe. In particular, we test whether women’s (men’s) transitions out of the labor force are causally related to the actual realization of their husbands’ (wives’) transition, using the institutional variation in country-specific early and full statutory retirement ages to instrument the latter. Exploiting the discontinuities in retirement behavior across countries, we find a significant joint retirement effect, especially for women, of around 16 to 18 percentage points. For men, we find a similar but less precise effect. Our empirical strategy allows us to give a causal interpretation to the effect we estimate. In addition, this effect has important implications for policy analysis.
    Keywords: Joint retirement, Social security incentives
    JEL: J26 D10 C21
    Date: 2013–11
  4. By: Cristina Martinez-Fernandez; Femke Verwest; Leo van Wissen; Tamara Weyman; Frank Cörvers; Jouke van Dijk; Arjen Edzes; Andries de Grip; Marije Hamersma; Philip Taylor; Jesper van Thor
    Abstract: Although the Netherlands population is increasing, the population growth rate, even if fluctuating considerably, has been declining since the 1960s. The Netherland’s age structure since the 1960s has also experienced change such as declining youth, significant increase in 40 to 65 age group, and gradual increases in the 65 to 80+ cohorts. As a result of the changing demography the workforce will be older and this will impact upon the labour market, increasing the number of older workers and reducing the number of new entrants into the labour market. The Netherlands case study revealed the complexity of the demographic challenges occurring within the regions, with each region (Groningen/Drenthe, Limburg and Zeeland) experiencing different issues associated with their socio-economic situations, localised population shrinkage, population ageing, migration, and labour force shortages and skill gaps. The analysis indicate that the Netherlands’ response to demographic change is well advanced, but additional actions can be undertaken, particularly regarding the shrinking and ageing society, and especially within the context of regional and local labour markets.
    Date: 2013–10–30
  5. By: Nicolas Moreau (Université de la Réunion); Elena Stancanelli (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: Earlier literature has investigated the drop in household consumption upon retirement of the head of the household, the so-called “retirement consumption puzzle”. Here, we expand on these studies by considering also retirement of the wife, thus distinguishing households in which the wife is a “housewife” from ‘dual-earners’. We use a regression discontinuity approach to estimate the effect of each partner's retirement on household consumption. We use for the analysis data drawn from the French Consumer Budget Survey 2001 that collected two-week expenditure diaries. We find a significant and sizable drop in food and clothes expenditure upon retirement of the male partner. However, the drop in food expenditure is not robust to specification checks and it becomes statistically insignificant when dropping from the sample couples in which the wife is a housewife.
    Keywords: Consumption, ageing, retirement, regression discontinuity.
    JEL: D12 J22 J14 C1
    Date: 2013–10
  6. By: Ana Amélia Camarano; Solange Kanso; Daniele Fernandes
    Abstract: O Brasil, como na maioria dos países do mundo, políticas de reposição de renda pela perda da capacidade laborativa são baseadas na invalidez constatada e na invalidez presumida pela idade avançada. O objetivo deste trabalho é discutir as contradições das políticas que objetivam repor a renda da população idosa. Reconhece-se o grande avanço na expansão da cobertura da seguridade social como resultado da implementação das medidas estipuladas pela Constituição Federal de 1988. Estas permitiram a dissociação entre envelhecimento e pobreza. No entanto, a sua legislação aponta algumas contradições, como o descompasso entre as variações na idade à aposentadoria e o aumento da esperança de vida; a volta do aposentado para o mercado de trabalho sem nenhuma restrição, o que é permitido pela legislação; as diferenças na legislação da aposentadoria para homens e mulheres; e o fato de o benefício assistencial devido à idade avançada não ser vitalício. In Brazil, as in most countries, income replacement policies for the loss of labor capacity are based on observed disability and on presumed disability caused by advanced age. The objective of this paper is to discuss the contradictions of the policies target to compensate the elderly population for the loss of their labor capacity. We acknowledge the great progress in the widespread coverage of the social security as a result of the implementation of the measures set by the 1988 Constitution. These allowed the dissociation between aging and poverty. However, their legislation points out some contradictions as the mismatch between the changes in the retirement age and increasing life expectancy, the return of retired persons to the labor market without any restriction, which is allowed by law, differences in the retirement legislation for men and women and the fact that the assistance benefit due to old age is not a lifetime benefit as the other benefits are.
    Date: 2013–10
  7. By: Roger, Muriel; Caroli, Eve; Behaghel, Luc
    Abstract: We analyse the role of training in mitigating the negative impact of technical and organizational changes on the employment prospects of older workers. Using a panel of French firms in the late 1990s, we first estimate wage bill share equations for different age groups. Consistently with what is found in the literature, we find that adopting new technologies and innovative work practices negatively affects the wage bill share of older workers. In contrast, training older workers more than average increases their share in the wage bill in the next period. So, training contributes to offset the negative impact of ICT and innovative work practices. However, it does not reduce the age bias associated with these innovative devices : the interaction terms between training and ICT/innovative work practices are either insignificant or negative. As a second step, we estimate the impact of ICT, innovative work practices and training on employment flows by age group in the next period. We get similar results to those obtained with wage bill shares. Overall, training appears to have a positive impact on the employability of older workers, but it offers limited prospects to dampen the age bias associated with new technologies and innovative work practices.
    Keywords: Technical change; organizational change; training; older workers;
    JEL: J14 J24 J26 O30
    Date: 2013
  8. By: Alicia H. Munnell; Jean-Pierre Aubry; Josh Hurwitz; Mark Cafarelli
    Abstract: Stories in the popular press suggest – particularly in the wake of the bankruptcy of Detroit – that pensions are the major expense of American cities and will lead to their widespread collapse.1 Thus, it is important to know the burden of pensions on cities. This burden can be measured in two ways. The first is the direct cost of pensions to city governments. These costs include contributions to locally-administered plans, contributions to state non-teacher plans, and contributions to state teacher plans on behalf of dependent school districts. The direct cost measures the pressure on the city’s finances. But there is also a broader question: how much do residents of a city pay for pensions? Here one would add to the city’s direct costs the contributions made by independent school districts that serve city residents and contributions that city residents make to county plans. This second concept – which is more comprehensive, avoids distortions created by local government arrangements, and provides a measure of residents’ incentive to move – is the focus of this brief. The question is whether pension costs – measured comprehensively – account for 5 percent or 50 percent of total local revenue raised from city taxpayers. (The Appendix presents both measures of the pension burden.) The discussion proceeds as follows. The first section highlights the importance of looking beyond the cost of locally-administered plans and describes the process of collecting and allocating the amounts paid for pensions by school districts within the city and by counties in which the cities are located. The second section describes our sample of 173 cities and illustrates how costs and revenues from the various units of local government are allocated to city taxpayers. The third section reports that, for the full sample, overall pension costs borne by city residents amount to 7.9 percent of revenue. The discrepancy between the 7.9 percent and the average reported in the U.S. Census of 5.6 percent is primarily because our study uses the full Annual Required Contribution (ARC), while the Census reports the amount that the local governments actually paid. In terms of individual cities, taxpayer costs average 2.7 percent of revenue for the least expensive fifth of cities and 12.3 percent for the top fifth. Among major cities, Chicago, New York, and Philadelphia have very high pension costs. Detroit was #61 primarily because it issued Pension Obligation Bonds in 2005, which increased its overall borrowing costs but reduced its reported pension expense. The final section concludes that pension costs are closer to 5 percent of revenue than to 50 percent for cities, even in the wake of two financial crises and the Great Recession. However, in those cases where pensions are both expensive and underfunded, such as Chicago, they exacerbate fiscal problems.
    Date: 2013–11
  9. By: Goltz, Andreas; Arnault, Louis
    Abstract: This paper focuses on the trade-o between formal and informal care for disabled elderly people living at home in France. Using the French 2008 household Disability - Healthcare data (Handicap Sant e M enages - HSM 2008), we aim to elucidate the e ect of an increase in formal home-care hours on the participation of informal caregivers. We expand on the previous literature, which almost exclusively focuses on the e ect of informal care on formal home care. We estimate a bivariate Tobit model to account for both the censor and the potential endogeneity of our formal home-care vari- able. Our results con rm that crowding out of informal caregivers arises when the elderly dependent receives more hours of formal home care. Nevertheless, the crowding out of informal caregivers that arises when only personal formal home care increases is much weaker. Such crowding out can be interpreted negatively as a renouncement of informal caregivers, but it may also allow some of these caregivers to work more or re-enter the labor market.
    Keywords: Long-term Care; Informal Care; Formal Care; Bivariate Tobit Model; Instrumental Variable;
    JEL: I11 I12 J22
    Date: 2013–06
  10. By: Renuka Sane (Indian Statistical Institute, New Delhi); Susan Thomas (Indira Gandhi Institute of Development Research)
    Abstract: This paper examines who contributes and who persists in contributing in a national, voluntary, defined contributory pension program, where the government provides the incentive of matching contributions of a minimum amount (USD 16). The paper uses proprietary data from a financial services firm where 12 percent of customers (37000 individuals) chose to participate in this program. The evidence shows that only about 50 percent of contributors reach the minimum amount for the co-contribution, but that participants persist in contributing even if they failed to contribute the minimum amount in a given year. While this paper does not provide causal estimates, it does present evidence of considerable interest among the informal sector in a state-run voluntary pension program in an emerging market where access to formal finance is otherwise poor.
    Keywords: informal sector workers, pension accounts, matched defined contribution
    JEL: H55 G11 D14
    Date: 2013–10
  11. By: Hiroaki Sasaki
    Abstract: This paper builds a two-country, two-sector, non-scale growth model and investigates the relationship between trade patterns and the growth rate of per capita real consumption. We consider negative population growth as well as positive population growth. We show that, as long as the population growth rates of the two countries are different, if the country that accumulates capital stock has negative population growth, no trade patterns are sustainable in the long run. This is true irrespective of the population growth rate of the other country. Moreover, we show that, if the country that accumulates capital stock has positive population growth, two trade patterns are sustainable in the long run. In this case, either each country's per capita growth is determined by the population growth of the capital-accumulating country or the population growth of both countries, depending on which of the two trade patterns is realized.
    Keywords: positive/negative population growth, trade patterns, non-scale growth model
    JEL: F10 F43 O11 O41
    Date: 2013–10

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